Imagination Technologies has seen its shares jump more than 8% after the chip designer announced a number of collaborations, including with Oracle.
It has linked up with Oracle to enhance the US company's Java software for internet of things applications and for Imagination's MIPS architecture.
Imagination has also made agreements with a number of technology companies - including Broadcom, Qualcomm and Ingenic Semiconductor - to form an open source foundation called prpl (apparently pronounce 'purple') to develop applications and devices using MIPS and other architectures. Analyst Lee Simpson at Jefferies said:
Imagination has used its annual summit in Santa Clara to announce a new collaboration with Oracle as well as a new open source foundation called 'prpl' (pronounced "purple"). The creation of a new partnership community, making Java native to MIPS and introducing new boards that support Imagination's FlowCloud technology helps to bring MIPS to a wider developer community. This significantly improves the MIPS ecosystem in the internet of things space.
[The Oracle collaboration] significantly improves the ecosystem around MIPS and helps tie licensees to the growing interest in the Java solution for internet of things. In addition, Imagination and Oracle will work to improve Java on systems using PowerVR graphics.
[The prpl] foundation will enable developers to draw on the resources of most of the MIPS licensees and allow them to create internet of things applications and devices that share open source innovations. Initial domains targeted include data centre, networking, digital home and the embedded/internet of things space. Imagination intends to bring a lot more open source projects based on MIPS as well as make tool chains, software libraries, and build environments available.
In a buy note Liberum said:
MIPS' lack of software ecosystem has been a barrier for the adoption of its technology.
With the creation of this consortium and strong industry backing MIPS' technology can be more widely adopted.
No change to numbers, but [this is] positive for the longer term adoption of MIPS. Most investors we speak to believe MIPS is going to be steam-rolled by Arm and worth nothing. We believe MIPS has good technology and Imagination's ownership providers stability enabling customer to engage. Imagination has set a target for MIPS to gain 25% share of the CPU market. If it does this MIPS should be worth around 25% of Arm or £3bn versus its current market cap of £0.5bn. The semiconductor industry seems to be looking for an alternative to Arm which MIPS offers.
Imagination is currently up 17.9p at 227.2p.
